Obama: Tax overhaul should fund transportation projects

WASHINGTON (USA TODAY) - President Obama will propose Wednesday a four-year, $302
billion highway bill that would be half funded by a corporate tax
overhaul that Senate leaders have already said is unlikely to pass this
year.

Obama's proposal aims to avoid repeated short-term
extensions of construction funding for highways, bridges, railways and
transit programs, and to protect 700,000 jobs, according to the
administration. But Congress has been reluctant in recent years to
approve longer extensions as the gas tax that funds the construction
projects has failed to keep pace.

Obama's legislative proposal
will come during a trip to Minnesota, where he and Transportation
Secretary Anthony Foxx will launch a competition for $600 million in
grants for local projects nationwide.

But the longer-term prospects for transportation funding are uncertain because the current law expires in September.

The
Congressional Budget Office has projected that without a funding
infusion, the Highway Trust Fund will be unable to embark on new highway
projects in 2015. Foxx has said the fund could start bouncing checks in
August.

The gas tax of 18.4 cents per gallon hasn't been raised
since 1993, which hasn't kept pace with inflation or with vehicles that
are traveling further on the same amount of fuel.

Sen. Barbara
Boxer, D-Calif., head of the panel that oversees highways, said the
Environment and Public Works Committee will vote in April on legislation
that would authorize highway programs for five or six years. Rep. Bill
Shuster, R-Pa., who is head of the House Transportation and
Infrastructure Committee, is also planning to vote this summer on a bill
that would extend highway funding.

But Obama signaled in his
State of the Union Address that he supports using the proceeds from a
corporate tax overhaul - rather than raising the gas tax, as business
and labor leaders have urged - to fund transportation projects.

But Senate Majority Leader Harry Reid, D-Nev., said Tuesday rewriting the tax code will be "extremely difficult" this year.

Obama
will tour St. Paul's Metro Transit light-rail operations and
maintenance facility at 1:15 p.m. Then he will deliver his policy speech
at Union Depot about 2 p.m.

As part of his proposal, Obama is
expected to propose $150 billion in one-time funding for transportation
projects in order to demonstrate how investing will create jobs,
according to the administration. The money would come from closing tax
loopholes, lowering tax rates and making the corporate tax system
fairer, according to a fact sheet provided by the Department of
Transportation.

Obama, who met Tuesday with House Speaker John
Boehner, R-Ohio, will make clear that he is open to other funding ideas
and wants to work with Congress in a bipartisan fashion to complete a
highway bill, according to the fact sheet.